Alibaba starts Bengaluru operations, signs deal with CoWrks

While refusing to comment on the Alibaba deal, Sidharth Menda, CEO at CoWrks, said a lot of corporates have been rethinking their real estate strategy to now include working out of CoWrksSobia Khan | ET Bureau | March 28, 2017, 08:47 IST

Chinese ecommerce major Alibaba has rented 30 seats in a flexible office in Bengaluru as it seeks to set up presence in the startup capital of India. The company has signed the deal for the dedicated seats or private studios with co-working community venture CoWrks that is owned by RMZ, which is one of the largest commercial real estate developers in the country.

“The company has opted for a dedicated seat and has teams including admin, HR and operations working out of CoWrks in RMZ Infinity in Bengaluru,“ said a person having direct knowledge of the deal.

“Alibaba will be paying Rs 20,000 per desk per month.“ RMZ Infinity is a 400-seat dedicated flexible office space on Old Madras Road in Bengaluru.

While refusing to comment on the Alibaba deal, Sidharth Menda, CEO at CoWrks, said a lot of corporates have been rethinking their real estate strategy to now include working out of CoWrks. “This is due to the opportunity to work alongside a highly engaged and entrepreneurial community, which directly improves productivity. Employees prefer to hang out in the office till much later with like-minded people,“ he said.

Alibaba has been trying to up its presence in India as it looks to take on Amazon and home-grown etailer Flipkart in India's highly-competi tive ecommerce market.

Last year, it had opened its first dedicated office in Mumbai. The company had taken on lease 2,200 sq ft at Paltina Bandra-Kurla Complex, which is owned by Wadhwa Group.It is paying `275 per sq ft a month as rent. “India is an important emerging market with great potential and we are absolutely committed to developing this market for the long term,“ an Alibaba spokesperson said. “However, we do not, in principle, discuss rumours about our business plans in the media.“

At present, co-working operators have a small footprint in India but they are slowly carving out a significant space in the real estate industry. There are 61 co-working spaces in India, of which 16 were set up in 2016, according to data tracking firm Tracxn.

Numerous other international players are also showing keen interest in setting up co-working office facilities in the country, said industry observers. Large information technology, banking, financial services and insurance companies are increasingly opting for co-working spaces to cope with rising rentals and shortage of ready-to-move grade A offices in prime property markets across the country.

According to a report by Colliers International, co-working operators leased only 1.2 million sq ft in 2016, which accounted for 3% of the overall leasing volume. Co-working operators are likely to grow up to 8 to 9 million sq ft by 2020, the report said.